High yield remains our preferred risky asset

09-03-2016 | Insight

February was a month with two faces. The first part of the month was terrible for risky assets. At a certain moment it felt like we were reliving the financial crisis of 2008. The already firmly established growth fears were suddenly supplemented with fears over financial stability. The viability of the financial sector was questioned as more and more central banks seemed to be moving towards NIRP (a negative interest rate policy), the Bank of Japan being the latest to join this infamous club.

Lukas

Daalder

Former CIO Robeco Investment Solutions. Daalder left Robeco in July 2018.

The fear-mongering didn’t stop there; at some point the mother of all fears started to make ground, namely: Have we reached the point where monetary policy has lost its potency? And just when you thought the market would spiral completely out of control, it stabilized, turning the latter part of February into a much risk-friendlier period.

In a poor month for most assets, gold kept on shining. Source: Robeco.

We are not on the verge of recession

How firm the footing is remains uncertain. The only comfort we can give is that we do not think that we are on the verge of a recession. We are also starting to get some backing from economic data, the most noticeable one being a firm rebound in US manufacturing ISM, taking it almost back towards the 50 threshold. In line with our fundamental view we haven’t changed our positioning. We continue to prefer risky assets, and high yield is still our preferred one.

Far from facing recession, it is the US that keeps on rebounding, as Europe keeps on disappointing. Source: Citigroup.

Visit us on social media

Stay updated

The information contained in the Website is solely intended for professional investors within the meaning of the Dutch Act on the Financial Supervision (Wet op het financiële toezicht) or persons which are authorized to receive such information under any other applicable laws. More information about Robeco Institutional Asset Management B.V. More information on Robeco Luxembourg S.A.

Disclaimer

The information contained in the website is solely intended for professional investors. Some funds shown on this website fall outside the scope of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht) and therefore do not (need to) have a license from the Authority for the Financial Markets (AFM).

The funds shown on this website may not be available in your country. Please select your country website (top right corner) to view the products that are available in your country.

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

Robeco uses cookies to analyze your visit to this site, to share information via social media and to personalize the site and the advertisements in line with your own preferences. By clicking on agree or by continuing on this site, you agree to the above. More information and adjusting cookie settings.